The Newsletter of The Cliometric Society Winter 2013 Vol 27 No. 2 Economic History Association Annual Meeting 2012 By Shawn Michael Adrian, Steve Bannister, Fan Fei, Mary Eschelbach Hansen, Roy Mill, and Marlous van Waijenburg The 72nd annual meeting of the Economic History transport costs in international trade. Association convened from September 21-23, 2012, at the Sheraton Wall Centre Hotel in Vancouver. EHA Adrian Leonard (Cambridge) presented the final President Jeremy Atack, the program committee paper of the session—with perfect English diction. (Robert Margo, Ran Abramitzky, Leah Boustan, His early exploration of “The Pricing Revolution and Eugene White) and the local arrangements in Marine Insurance” uses new data to explain how committee (Angela Redish, David Jacks, Mauricio London companies became the leading insurers of Drelichman, Morten Jerven, and Catherine maritime trade in the 17th century. Discussant Eric Douglas) provided an outstanding weekend of lovely Hilt (Wellesley) encouraged Leonard to focus on accommodations and stimulating sessions. This article asymmetries of information (moral hazard and adverse summarizes the sessions at which original papers were selection) in the complex insurance market. presented. The theme of Session 2 was “Cities in Economic Session 1 covered the historical evolution of trade History.” Jim Sidola (UC-Irvine) presented “Razing and transport costs. Brandon Dupont (Western San Francisco: The 1906 Disaster and the Legacy Washington Univ.), Drew Keeling (Univ. of Zurich), of Urban Land Use” to an almost full room. The and Thomas Weiss (Univ. of Kansas) kicked off disastrous “experiment” allows Sidola to study the conference with a paper on tourism history. This whether land developers are hampered by prior early look at “Passenger Fares for Ocean Travel from development by comparing residential density in non- 1826 to 1916” focused on the relationship between affected areas to density in destroyed areas. Sidola’s trends in advertised fares and revenues and trends in unique data source is a data set of building permits. He cargo and passenger rates. Discussant Simone Wegge finds that residential density in razed blocks increased (College of Staten Island) praised the authors’ data significantly compared to non-razed blocks. He collection efforts. She encouraged them to display concludes that the durable capital in existing structures more moments of the data and to consider the discrete significantly constrains potential development. breaks in the trends that might be attributable to technological change. Discussant Rick Hornbeck (Harvard) questioned the utility of the residential density ratios in identifying Kris Inwood (Univ. of Guelph) and Ian Keay rigidities. He suggested using a Bellman (dynamic (Queen’s Univ.) presented “Reaffirming the programming) equation incorporating land and Importance of Transport Costs: Evidence from the building values to detect whether values converge Trans-Atlantic Iron Trade, 1870-1913.” Despite or increase in the long run in the razed area. declining transport costs over this period, exports of iron from Britain to North America also declined. Contents Inwood and Keay argue, however, that changes in the total effective cost of moving iron (including overland EHA Annual Meeting 2012...........……………...1 transport, wharfage fees, and other often-neglected Call for Papers...........……………..………….....8 costs) did have an impact on exports. Discussant Schedule of 2013 Sessions...........……………..13 Noam Yuchtman (UC-Berkeley) appreciated the Interview: Prof. Karl Gunnar Persson………...14 authors’ efforts to capture total shipping costs but Attention ASSA Attendees...........……………..22 doubted the paper’s generalizability. In particular, he wanted to know whether the routes observed were the best ones to study in order to understand the role of Theresa Gutberlet (Arizona) led off the questions Molly Ball valiantly fought through an extremely from the floor by asking whether the land changed hoarse voice to present “Real Wage Evolution in Sao from residential to commercial use. Bob Margo Paulo, Brazil, 1891-1930.” The paper uses new data to (Boston Univ.) suggested consulting the literature explore the nature of inequality during early industrial on cumulative density gradients. Michael Haines growth. Ball constructs wage series using firm-level (Colgate) noted that the Chicago fire created huge records from a railway company, an urban transport changes in architecture, and he wondered whether company, a textile manufacturing company, and a Sidola’s method was generalizable. Molly Ball retail store. She uses a food price index to estimate (UCLA) followed up on this theme, asking whether it real wages: they decreased steadily during the period. was possible that re-zoning could explain the results. She estimates that the skill premium increased through the period, implying growing wage inequality. William Sundstrom (Santa Clara) was scheduled to present a co-authored paper in this session. Discussant Robert Margo neatly summarized the The attendees appreciated the irony that, for this importance of Ball’s work. Margo attributed this conference on the “Transportation Revolution,” profound quote to Arnold Schoenberg, the 20th Sundstrom’s flight was cancelled. We know, however, century atonal composer: “There is still much good from the abstract in the conference booklet that the music that can be written in C major.” Margo said that paper uses “an event-study framework to examine the Ball writes in C major—work clearly fundamental impact of libraries on local economic development. to economic history. The audience laughed at Consistent with libraries catalyzing growth, our this opening in appreciation of Margo musical preliminary findings show that Carnegie’s library comparisons. Questions from the floor were led off grants are associated with significant increases in by Carl Mosk (Univ. of Victoria) who asked if any of grantee cities’ population.” Trevon Logan (Ohio the firms in the study offered non-monetary benefits. State) commented despite Sundstrom’s inability to Michael Huberman (Montreal) wondered if World defend himself. Logan had the audience laughing War I was part of the story or if those years should be early—he assumed that everyone had read the paper! removed. Logan’s comments included questions about the difference-in-difference approach, an admonition not The authors in Session 3 considered central banks to surrender to the “Cambridge exogeneity fairies,” “for liquidity and other purposes” from the early and a caution about IV monotonicity problems. Logan 19th century to the 1970s. Vincent Bignon (Bank of encouraged Sundstrom to take a GIS approach to his France) and Clemens Jobst (Austrian National Bank) question. considered whether firms with access to refinancing from the French central bank were able to avoid bankruptcy. They show that among districts affected by an exogenous shock to agricultural productivity, districts with a Bank of France branch had lower bankruptcy rates than districts without a branch. Discussant Phillip Hoffman (CalTech) worried that the opening of a Bank of France branch might be endogenous to the severity of the shock or the expected rate of bankruptcy. The second paper was about American bankruptcy and central bank liquidity during the Great Depression. Mary Hansen (American Univ.) presented new evidence from court case records showing that among bankrupts, those The graduate student poster sessions. Photo by Taylor Jaworski 2 who were more exposed to the St. Louis Fed’s no- presenting his joint work with Dave Donaldson bailout policy during the early Depression were (Harvard) titled, “Railroads and American Economic less leveraged than those who lived or had more Growth, A ‘Market Access’ Approach.” The paper creditors in the bailout-friendly Atlanta Fed’s District. revisits Fogel’s social saving question and estimates She interpreted this evidence as indicating that the the aggregate economic impact of the railroad network Atlanta Fed’s provided enough liquidity to allow from the perspective of market access. The authors use many to put off bankruptcy or to avoid it altogether. ArcGIS to calculate the lowest-cost county-to-county Discussant Hugh Rockoff (Rutgers) appreciated freight routes; they then estimate that changes in the additional evidence in favor of Friedman and market access are capitalized in agricultural land value Schwartz’s argument that a lender of last resort could with an elasticity of about 1.5. By their calculations, have moderated the Depression, though he cautioned removing all railroads in 1890 would have decreased that Hansen’s conclusions were, at present, based on a the total value of agricultural land in the U.S. by 73 small number of observations. percent and GNP by 6.3 percent. They note that this is more than double what Fogel estimated. Replacing The third paper took the session attendees back to railroads by canals only mitigates a small proportion France for its “golden age of growth.” Eric Monnet of the losses because railroads mainly connected non- (Paris School of Economics) presented his analysis of navigable parts of the country. the active French interventions in the financial sector from 1954 through 1974. He finds that extending Atack himself served as discussant. He first revisited medium and long term credit was positively correlated the two measures of social savings used by Fogel in with sectoral returns, which supports the view that Railroads and American